Cash is disappearing from our daily lives as a means of payment. Carrying enough cash for all purchases is tedious, and leaves individuals at risk for theft. It is becoming common to use credit cards for almost all purchases, both online and off. Paying with credit cards solves the above-mentioned problems with cash, but introduces its own set of challenges such as identify verification, stolen credit cards, stolen credit card numbers and cloned cards. Debit cards resolve some of these issues with credit cards, because the customer enters a PIN to verify his or her identity. Thus, a stolen debit card is useless without the PIN. However, thieves are able to create fake ATMs and attach devices to real ATMs that allow the cloning of debit cards and access to the PINs. Various contactless payment systems have been created that attempt to provide electronic payments, such as Visa payWave and Mastercard PayPass. These systems make it extremely difficult for thieves to clone a card, but the other above-discussed problems with credit cards are still present.
It would be desirable to address these issues concerning credit cards payments.
On a related note, individuals often exchange money for various reasons. For example, one friend might borrow money from another and then pay it back. An individual might buy an item from a private party after finding it, for example, on Craigslist. One relative may give a cash gift to another. Carrying and exchanging cash for these transactions is problematic for the reasons described above. Paying individuals with credit cards is difficult, as most individuals do not have a merchant account. Paying an individual through PayPal is a good solution where the payee is set up to receives payments this way, but not all individuals are. Furthermore, PayPal precludes making anonymous payments, as the payer must know the email address of the person being paid.
It would be desirable to address these issues concerning payments between individuals as well.